“Princes and governments are far more dangerous than other elements within society,” warned Machiavelli. He was wrong as the Independent Review into Business Practices at Barclays, the latest in a series of reports into the corrosive nature of investment banking, makes abundantly clear.

The probe into the manipulation of benchmark interest rates at Libor ultimately resulted in a £290m million settlement by Barclays with US and British regulatory authorities in June 2012. In February 2013, Barclays surprised everyone when it revealed that it had set aside £1 billion to cover mis-selling as part of a damages bill for Payment Protection Insurance (PPI) and the cost of compensating small businesses, bringing its overall estimated legal liabilities to £2.6 billion.

Barclay’s behaviour did not just impact on the bank’s shareholders and the public’s trust in the entire British financial system. It hit the exchequer, and ultimately the taxpayer, with lower tax returns.

A controversial tax avoidance unit within the bank, known as the Protium scheme within the Structured Capital Markets (SCM) division, devised a system of minimising tax bills. The Cayman Islands-based vehicle was used by the bank to outsource its problematic portfolio of highly toxic credit markets assets. This scheme served to distort Barclay’s bottom line and therefore facilitated extraordinary profit returns in 2009, despite the financial crisis hitting hard.

This gave the bank a competitive advantage among its peers. Hence, as reported in the Financial Times, the bank’s minuscule £113m corporation tax bill in 2009, a year when it made a record £11.6b in pre-tax profits. In 2012, the exchequer was the beneficiary of just £82 million despite top line profits of £7bn. In essence, the taxpayer substantially lost out because Barclays self-regulated the value of its own debt. In the 11 years to 2011, the Protium scheme generated £9.5bn in revenue for the bank. “Industrial scale tax avoidance” is how it was described by Lord Lawson, the former Conservative chancellor on the parliamentary commission on banking standards. Although the new chief executive of Barclays, Antony Jenkins, committed to shutting down the Protium scheme, what actual consequences were there? Chairman Marcus Agius resigned on a £750,000-a-year pension. Chief executive Bob Diamond resigned with on a severance package of around £2m and is now reported to be considering launching a hedge fund.

The release of the independent review, commissioned in the immediate aftermath of the LIBOR settlements, does not change that reality. The aim of the report is to evaluate the bank’s “values, principles and standards of operation – the historical culture – and to make recommendations for change.” Anthony Salz a leading corporate lawyer in London was tasked to interpret these broad terms of reference. Published this week, the 236 page review references “culture” 424 occasions and not surprisingly gives prominent coverage to the widely reported Protium debacle.

Protium, Salz believes, illustrates how the SCM scheme “damaged Barclays’ reputation in the eyes of its regulators and the market”. It was a complex transaction that the bank “believed complied with the rules”. This “mis-judgment” by Barclay’s management was part of “unusual incentive arrangements” within the bank. Salz concludes rather vaguely “if Barclays is to restore its reputation and rebuild trust, it needs to consider much more thoroughly the reputational impact of businesses and transactions in which it is engaged, such as the activities sanctioned by the SCM.

Perhaps it is not unusual that a star corporate lawyer turned chair of the BBC board of governors turned investment banker proposes to widen the net of culpability to all and sundry. If everyone is to blame then no one is to blame. If it is no one’s fault, then of course, no one can be held accountable. For instance, the report has a section on “people” yet not one person is identified. The report shrewdly avoids focusing on individual failings. Instead, the bank’s collective “corporate character” is at fault. The “imbalance between high pay (at least for some), high risk, and treatment of customers and other stakeholder interests” developed a specific “culture” based on “the struggle for survival, independent of government, (which) dominated its activities,” the report concludes.

Yet it was individuals that financially benefited from this collective culture. The average managing director bonus at Barclays was 350% of base salary in 2011, reducing to 210% in 2012. These “overly generous bonuses” as Salz describes them had no peer equivalent. The bank’s 70 top executives achieved 35 per cent more than peers at other banks in 2010. Salz makes the rather obvious conclusion that “elevated pay levels inevitably distort culture, tending to attract people who measure their personal success principally on compensation.”

The importance of culture on framing behaviour has long been recognised. In his analysis on the World Bank, Galit A. Sarfat demonstrated how socialisation conditions employees “through recruitment procedures, training, informal conversations with peers, and rituals that validate the organisational culture. Norm socialization processes inculcate employees with the generally accepted values and expected behaviour in the organization.” Salz puts it more bluntly: “leadership plays an important role in collectivising the unconscious processes.”

This frame of cultural analysis and its focus on leadership, restructuring notions of personal accountability, values and emphasis on trust, is in vogue. The review follows a palpable trend in other international banking reports with its focus on how culture can magnify systematic failings. Here, Salz describes it rather uniquely as ‘cultural corruption’ while elsewhere, as in Ireland for example, it is referred to as ‘group-think.’

Salz is existential and philosophical in his approach and proposes to reintroduce emotion, of all things, into risk assessment – “Rationalised wishful thinking allows us to detach ourselves from the emotions that would normally signify risks,” he notes. Salz attempts to recalibrate the balance between risk and personal ethical responsibility. “These emotions start with anxiety and can escalate to shame and then genuine guilt. In an absence of acknowledging these emotional states, we are in a semi-delusional state of mind (or a corrupt state of mind) in which, rather than admit responsibility, or learn from our mistakes, we create rational logical arguments which explain our actions.”

The report places extraordinary emphasis on how prior culture incentivised and condoned certain conduct. A set of beliefs, attitudes, opinions and norms ultimately decided what types of behaviour was considered acceptable. In Barclays, a particular set of values placed particular significance on informal rules of behaviour which elevated the importance certain behaviour. This “culture” didn’t happen by accident or in a leadership vacuum. It was deliberate and delivered colossal financial gain for the bank and its employees.

The 34 recommendations of the Salz Review focus on five broad areas – culture, regulatory and tax matters, compensation, leadership and governance and the = nature of investment banking itself. However, given that the terms of reference precluded any detailed examination of matters under legal privilege, the review itself and therefore the recommendations do little to advance the critical question of how to regulate culture. As Simon Nixon of the Wall Street Journal cogently put it, the report “is largely comprised of statements of the obvious…Anyone looking for fresh insight into the extraordinary failures that led to the resignation of the bank’s chairman, chief executive and chief operating officer will have been disappointed.”

The unresolved question is whether there has been an admission of responsibility, guilt or shame within Barclays. Without it, no credible reform is likely, a fact recognised by Salz. The real value of the report will only become clear when the bank demonstrates that cultural norms have changed and that is an empirical question.

Why did so many honest decent Germans wholeheartedly support and actively participate in the crimes of Nazism and then when the war was over revert to being decent people again? Or should every German over a certain age have to explain their actions from before 1945?

So did so many honest financial services staff do nothing to stop the culture that was spread by the Fred Goodwin and Bob Diamond and now they’ve gone is the culture in retreat?

Why does society condone a footballer being paid £150k a week (no doubt via some convoluted tax minimisation scheme) for a club that is surrounded by deprivation and where even a portion of that money could make a real impact on people’s lives.

Why do we have nothing to say about a banker, someone who sits at a desk in an office, getting an entire remuneration package above £500k.

Who sets the debate about considering a business a failure when it doesn’t make more profit this year than last and why is a business that makes less profit, but instead chose to use the profit it made to protect jobs rather than shareholders not a good investment?

Since when was it ok to run a business a not understand that every day you do your books and you put aside the money you’ll need for future bills ie you need to sell £100 and from that you divide it up into every bill that falls due and that profit is not money left over at the end of the day but is money left after every single bill has been accounted for.

Why is it people whinge about the calibre of our political class and wallow in denial that they are to blame because of the type of people they vote for again and again.

Why has the media in Ireland failed to complete an exposure of TDs/Senators expenses and vested interests the same as there has been in the UK and in many other countries.

Some argue love/hate are the strongest emotions but I do not agree.

Denial is the strongest human emotion and denial is at the root cause of all the issues I mention above.

Therefore, it’s not an issue of culture it is an issue of the scale of denial that allows others to fill the void.

There is a clear relationship between leadership and the development of culture in all forms of organisations (as described by Schein). Leaders propose solutions to internal integration and external adaptation, which based on their perceived success are accepted by the organisation, being copied and adapted in future situations which might be seen as similar. Anyone in an organisation who perpetuates graft or contributes to the lowering of norms is acting as a leader, and may consequently be considered guilty when the culture is seen to be at fault.

Groupthink is not the same as culture. It is a particular situation when members of an organisation no longer trust their environment, or indeed other members of their own organisation. It is driven by fear and characterised by a lack of questioning. It is not then the same as culture. Indeed, according to Surowiecki, cultures that are dynamic and diverse are more likely to be successful. By a twist of history, Ireland has defined itself on all sides of its divides by particularly homogeneous definitions of Irishness. Banks like Barclays and countries like Ireland need to promote diversity, while also promoting individual identification with what makes them great.

This is where reform should start. It might start with re-franchising citizens living abroad or by promoting deeper rapprochament with the Ireland on either sides of the border. Media is central in developing this. Media laws that restrict concentration of ownership and ensure the state broadcaster is less establishment by nature would also help.